FINANCIAL REPORTING & ANALYSIS Essay Example | Topics and Well Written Essays - 2000 words

FINANCIAL REPORTING & ANALYSIS - Essay Example ent by taking into consideration the concepts of capital maintenance and also analyse the general purpose of financial statements while considering the information provided in the key components of financial statements. In a wide systems-based perspective, an organisation is part of a much broader social system: the entity is presumed to be persuaded by, and, in effect, to have power on, the society wherein it operates (RudÃ… ¾ionienÄâ€" 2006, p. 52). Therefore, an organisation must pay attention to the expectation of specific users of accounting information so as to gratify the interests of all users (customers, employees, suppliers, capital providers, all users, regulators and foreign suppliers and customers) in order to acquire information for their decision-making. Stakeholders need truthful and informative accounting information for them to make the accurate decisions (RudÃ… ¾ionienÄâ€" 2006, p. 52). Enterprise’s financial accounting regulation (as an entity of accounting methods, principles and rules used for accounting and preparing and presenting financial statements) making process, according to Deegan (2003, p. 19) is vital, not just for the firm’s management, but for stak eholders, as well, who utilise the financial accounting data. Nevertheless, there is an inverse relation in that stakeholder’s interests might persuade a firm’s financial accounting law-making. The key elements of financial accounting law-making, according to Deaconu, Nistor, & Popa (2009, p. 40) are financial accounting policy selection, as well as its full disclosure in financial statements. The full disclosure financial accounting policy in financial statements is significant for stakeholders, as well: financial statements must be made, not just for regulators and investors, but also for other significant and non-significant stakeholders in order for a company to feel accountable in the community or society where it performs. Stakeholders require truthful and informative accounting